Goldman Sachs Blames Zero-Day Options for Fueling S&P 500 Selloff
- Impact further amplified when market liquidity is worsening
- UBS study shows zero-day options play a role in stock dynamics
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Look closely at the contours of Tuesday’s tumble in the S&P 500 and fingerprints of a new market force come into focus.
They’re options tied to S&P 500 with a maturity less than 24 hours. A flurry of trading in the contracts known as zero days to expiration, or 0DTE, was the backdrop to a jarring acceleration of the day’s decline, one in which the equity benchmark slid roughly 0.4% in 20 minutes, according to Goldman Sachs Group Inc.’s managing director Scott Rubner.